The term “territory management” is somewhat of a misnomer. You cannot manage a territory. You can, however, manage your salespeople’s activities within a territory and develop strategies to direct selling efforts to maximize the ROI for your company.
Good territory management will ensure that salespeople are calling on the appropriate customers for the appropriate reasons, and at the appropriate intervals. The ultimate objective is to identify and direct salespeople’s efforts to increase the bottom line. Territory management should be a systematic process with identifiable steps.
Following is a five-step process for effective territory management:
Step 1: Do the research
You can’t develop relevant and meaningful goals, strategies, plans and actions unless you thoroughly understand the landscape. You must examine and consider:
- The makeup of and influences on the market in which you sell;
- The nature of the customers to whom you sell;
- The marketplace acceptance of the products/services you sell;
- The existing strategies driving the process by which you sell;
- The challenges you face and the opportunities available to you.
With that in hand, the salesperson can now develop a market profile that includes an analysis of the customer relationships, market share, product demand, competitive positioning, market direction and industry trends.
Step 2: Analyze the data
Once you have the data, you’ll need to analyze it in a manner that helps you better understand your customers, your markets, the challenges you face and the opportunities available to you. Performing a SWOT analysis — identifying strengths, weaknesses, opportunities and threats — is a useful method.
Step 3: Identify goals
Proper analysis of the data collected will enable you to identify:
- Opportunities to increase your competitive advantage in areas that are important to the market targets, whether they be new customers or existing customers;
- Product and service offerings that will emphasize your strengths;
- Challenges that threaten sales and profitability.
With that information, you can set goals for specific market sectors, revenue streams and customer groups that will serve as guides for the allocation of department resources, territory assignments and account targeting.
Step 4: Develop strategies
Having identified specific goals, you can begin to develop strategies to reach the goals. You will have to consider the interconnected relationship of your market, your customers, your products, your market share and your competition. These factors rarely operate in isolation.
Step 5: Develop action plans
After analyzing territory opportunities, identifying goals and developing specific territory management strategies, it’s time to develop plans to put the strategies into action.
These action plans will typically fall under three categories:
- Market Level: Developed from a big picture view of your market.
- Segment Level: Focusing on a particular market segment or revenue stream.
- Account Level: Focusing on the most efficient and effective way to grow and service clients.
Ultimately, the goal of territory management is to decide where and how to allocate resources in such a manner as to generate the greatest ROI of those resources.
Dave Harman is an associate with Sandler Training. He has over 30 years’ experience in sales and sales management with Fortune 500 companies as well as small, family-owned organizations. He has held positions from sales to senior management with companies such as Conoco/Vista, Amresco and Ohio Awning, and owns his own business. He earned his MBA with a concentration in Marketing from Miami University, Oxford, Ohio. You can reach him at [email protected] or (888) 448-2030.
